UPDATE 5 (2011-3-28):Radio Free Asia updates us on the Legea deal. According to the article:

Officials of North Korea’s team and Legea met last week at the company’s headquarters in the Italian city of Pompeii and discussed details of a new jersey design under a four-year sponsorship agreement initiated at the end of the last World Cup tournament.

Two “key stakeholders” from the North Korean team discussed new designs for the team uniform and an expansion of their successful partnership during the 2010 World Cup in South Africa, according to Lorenzo Grimaldi, the company’s marketing and sponsorship manager.

“Two core members of the North Korean soccer team met with company officials over the course of the two days mostly to discuss new [uniform] collections,” resulting in a decision to move forward, Grimaldi told RFA.

During the meetings, the two sides are believed to have exchanged ideas about Legea’s newly-launched Saga soccer uniform line and related supplies, as well as what support would be provided for the North Korean team.

Specific details of the arrangement were also discussed ahead of the North Korean women’s national soccer team’s participation in the 2011 Women’s World Cup in Germany. Legea will be sponsoring the women’s team for the tournament.

Originally, North Korean national soccer team officials and Legea had scheduled the meetings in February, but Grimaldi said they were rescheduled due to visa approval and flight delay issues.

Key sponsor

Legea has sponsored the North Korean national soccer team since the 2010 FIFA World Cup and has agreed to continue as a key sponsor for the next four years. The sponsorship for the period was valued at U.S. $4.9 million, including products for the national women’s and youth teams.

Last year, Legea sold a substantial amount of North Korean team replica jerseys, team-related merchandise and other apparel from a selection of more than 2,000 items, and Grimaldi said continued sanctions on the country have only increased the popularity of the merchandise.

He said Legea confirmed a global interest in the North Korean soccer team through its surprisingly high sales of replica jerseys last year, despite the team’s early exit from the World Cup.

Legea said the soccer team’s sportswear was popular in countries including the U.K., Spain, the U.S., and South Korea.

In Spain, Legea recorded sales of nearly 1 million Euros (U.S. $1.35 million).

Itagoal, a Legea product retailer in New York, confirmed high numbers of sales in the U.S. last year.

A representative of Itagoal said the company is eagerly awaiting a new shipment of North Korean team products from Italy.

North Korea is returning to the World Cup after 44 years, and venturing into the sports marketing industry that evolved in its absence.

Ahead of the June 11 start of the tournament, the soccer team of Kim Jong Il’s regime has snared a 4 million-euro ($4.9 million) jersey contract over four years, according to Daniele Nastro, marketing director of Pompeii, Italy-based sports apparel maker Legea s.r.l. North Korean soccer association assistant general secretary Ri Kang Hong confirmed the deal with Legea, without giving financial details.

“Perhaps it’s a sign of incipient capitalism,” Jim Hoare, a retired British diplomat who served in Pyongyang, said from London. Although western sports leagues aren’t covered by the media in North Korea, officials “would be aware of the value of sports sponsorship,” Hoare said.

The deal is timely as North Korea faces trade restrictions. South Korea halted business last month after blaming the communist nation for a torpedo attack on a warship that killed 46 sailors in March. Japan has tightened controls on sending money to the North, which was already under United Nations sanctions for nuclear testing.

Kim’s regime is “hungry” for foreign cash, according to Scott Snyder, director of the Center for U.S.-Korea Policy at The Asia Foundation in Washington. “The economy is in a very difficult situation,” he added.

1,000-to-1 Chance

Ranked No. 105 in the world, North Korea takes on the Nike Inc.-clad Brazil, the record five-time world champion, in its opening game on June 15 in Johannesburg. Ladbrokes Plc, a U.K. oddsmaker, rates North Korea a 16-to-1 chance to defeat Brazil, meaning a $1 bet would yield $16 in profit.

The communist state is given a 1,000-to-1 chance of winning the tournament, according to Ladbrokes.

At the 1966 World Cup in England, when brand names were absent from even European team uniforms, North Korea wore plain red shirts when it upset Italy 1-0 to reach the quarterfinals and won the affection of the English, who “probably felt sorry for them,” Hoare said. England now commands about 34 million euros a year from Nike Inc.’s Umbro brand, making it the top earner of the 32 teams that will play at the World Cup in South Africa, according to Sport + Markt AG.

No Apparel Market

North Korea’s team is getting an amount similar to what might be paid to a low-ranking team in the English Premier League, the world’s richest soccer league, according to Simon Chadwick, a sports business professor at the U.K.’s Coventry University. Ri, in an interview in Tokyo last week, said it was hard to find a jersey sponsor as there’s “no market” for sports apparel in North Korea.

“If it doesn’t result in sales, there’s no point” for some sporting-goods companies, Ri said.

Legea will provide North Korea with branded World Cup jerseys and training gear, Nastro said. That will help raise the Italian brand’s international profile, although the marketing bet could backfire, Chadwick said.

Legea “will be working overtime to put clear blue water between the team and the regime,” Chadwick said. “It could get to the stage when people stop buying the brand if they’re being seen as propping up a dictatorship.”

While not breaking trade sanctions, Legea is “swimming against the tide” with its sponsorship because of the perception of North Korea, Snyder said. “It’s a bit like sponsoring Tiger Woods at the moment,” he said.

Nastro said he isn’t worried. “In the World Cup, politics will be out,” he said by telephone from Pompeii.

Rival Chinese Bid

North Korea received other bids. It declined an offer by China Hongxing Sports Ltd., the Singapore-listed company that provided its jerseys for qualifying games, according to Kelvin Yeung, chief financial officer of the Chinese company.

European brands might have bid more, Yeung said, without saying how much China Hongxing offered. Ri said the agreement with the Quanzhou, China-based company had expired and declined to comment on why it wasn’t renewed.

North Korea rejected Legea’s first design for its shirts as too modern, frowning upon a white line across a red shirt, Nastro said.

“As a people, we don’t like flashy designs,” Ri said. “For home games, the jerseys are white, which we regard as noble, and it reflects our spirit. For away games, we go with red, which is used in our national flag. It also symbolizes our passion and heart. A simple design expresses that more purely.”

As part of the shirt deal agreed in March, there is a kicker for North Korea: it will get a 10 million euro bonus if it wins the World Cup, Nastro said.

UPDATE 2(2010-6-3): Apprarently Italian sports apparel firm Legea snagged the DPRK men’s and women’s football contracts. According to the Economist:

Bloomberg reports that North Korea has signed a four year – 4 million-euro Legea kit deal, according to Daniele Nastro, marketing director of Pompeii, Italy-based sports apparel maker Legea.

North Korean football association assistant general secretary Ri Kang Hong confirmed the deal with Legea, without giving financial details.

North Korea received other bids. It declined an offer by China Hongxing Sports Ltd., the Singapore-listed company that provided its jerseys for qualifying games, according to Kelvin Yeung, chief financial officer of the Chinese company.

European brands might have bid more, Yeung said, without saying how much China Hongxing offered. Ri said the agreement with the Quanzhou, China-based company had expired and declined to comment on why it wasn’t renewed.

North Korea rejected Legea’s first design for its shirts as too modern, frowning upon a white line across a red shirt, Nastro said.

“As a people, we don’t like flashy designs,” Ri said. “For home games, the jerseys are white, which we regard as noble, and it reflects our spirit. For away games, we go with red, which is used in our national flag. It also symbolizes our passion and heart. A simple design expresses that more purely.”

UPDATE 1 (2009-6-21): The Western media has picked up on this story and added a few details. According to the Los Angeles Times:

Since sponsorship for North Korean teams began, Hongxing’s domestic presence has grown to nearly 3,800 retail outlets across China from about 100 in 2000. And with the World Cup qualification, Erke is confident its investment in an overseas market versus competing for domestic sponsorships with Adidas and Nike will pay off.

“Football is one of the areas which we feel have a lot of potential for development and we hope to be able to raise our brand visibility … in major events, such as the World Cup,” Yeo said.

In 2008, the company expanded its scope of international sponsorships to include the International Table Tennis Federation Pro Tour and its tournaments in Qatar, Austria, Germany and France.

ORIGINAL POST (2010-4-4): Chinese sportswear firm to sponsor DPRK team at football World Cup, by Michael Rank

The Chinese sporting goods company Hongxing, which sponsored the North Korean Olympics team in Beijing (here and here), will do the same for the North Korean squad at the football World Cup in South Africa in June, a Chinese website reported.

The Singapore-listed company, which markets its products under the brand Erke , sponsored the North Koreans to the tune of $3 million at the Olympics, which resulted in “very good publicity results”, the website added. The company has over 3,000 shops in China, it said.

The firm will kit the team out in clothes, boots and luggage as well as providing training, but the report did not give a value for the World Cup sponsorship.

A company official was quoted as saying: “Ever since [North] Korea qualified for the World Cup in South Africa, the fame of the brand on the Chinese mainland has gradually reached a peak. We expect the publicity results of the [North] Korean team will help promote a rise in sales.”

It quoted Wu Rongzhao, deputy chief executive of China Hongxing Sports, as saying sponsorship of the North Korean team was “a very painful process.” Erke had to scrub plans for a marketing event timed to the Games’ opening because of red tape and bureaucracy. For instance, Pyongyang’s Olympic officials would communicate only by email, not by phone, the paper added.

Wu said sponsorship of the North Korean team was aimed at the domestic Chinese market. It “will allow us to capture a bigger share of the growing PRC sporting goods market in the run-up to the Beijing 2008 Olympics.”

Asked to comment on the latest report, an Erke spokesman told North Korean Economy Watch in an email that “we are unable to confirm the content from the link provided by you at this moment. Please check our official press release regarding all sponsorship issues.” Hongxing is based in the coastal city of Quanzhou in Fujian province.

Apart from sponsoring the North Korean Olympics team, Hongxing also sponsored the country’s women’s football team in the FIFA Women’s World Cup held in China in 2007. North Korea were knocked out in the quarterfinals to Germany, who went on the win the tournament.

North Korea will be making their second-ever appearance at the World Cup this summer, after unexpectedly making it into the tournament in Britain in 1966, when it shocked the world by defeating Italy en route to the quarterfinals.

Drawn in a fearsome-looking Group G in South Africa alongside five-time world champions Brazil, European heavyweights Portugal and African powerhouses Côte d’Ivoire, the North Korean Chollima squad kick off their campaign against Brazil on 15 June in Johannesburg.

Assistant coach Jo Tong-Sop said in January after winning the International Friendship Football Tournament in Qatar: “Given the teams we’ve been drawn against, we face a difficult task at South Africa 2010, though I hope that this win will boost our confidence.”

“Our group will be very tough as it includes some of the highest-ranked teams in the world. They have some fantastic individual players, not to mention their teamwork and tactical ability, all of which will make life very hard for us in South Africa,” Jo told FIFA.com.

North Korea’s chances in the World Cup seem slim and it is a footballing minnow compared with the South. South Korea is the only Asian team to have qualified for the World Cup for seven times consecutively and currently holds the best FIFA World Cup record in Asia, according to Wikipedia.

South Korea and Japan co-hosted the World Cup in 2002, the first time the championships had been held in Asia and the first time the tournament had been hosted by more than one country.

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